Lawsuit alleges Visa has undertaken a series of illegal actions that undermine competition Discover Financial Services Inc. announced last week that it is suing Visa Inc., alleging that the card company has been using antitrust practices in its debit card business, reports the Chicago Tribune.
Discover, through its Pulse Network LLC unit, alleges that “in order to maintain its monopoly, Visa has undertaken a series of illegal actions that undermine competition — harming rival debit networks, merchants, acquirers, card issuers, and consumers.”
Pymts.com reports that one of Discover’s accusations is that Visa has pushed signature debit, despite the security advantages of PIN debit. “Visa dominates the provision of signature debit network services, maintaining a market position based on charging higher fees for its services and earning higher profits. Permitting the superior PIN debit to predominate in the marketplace would cost Visa a lot of money. Accordingly, Visa has a long history of making sure that does not happen, including undertaking illegal behavior to fend off competitive threats to its debit network services monopoly.”
Discover also says that Visa is offering economic incentives to merchants to choose the Visa network for transactions.